\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 398 Hla Group Corp.Ltd(600398) )
In 2021, the company’s operating revenue was 20.19 billion, a year-on-year increase of 12.4%, and its net profit was 2.49 billion, a year-on-year increase of 39.6%. 22q1 revenue and net profit reached 5.21 billion and 720 million respectively, with a year-on-year decrease of 5.2% and 14.2%. The annual report plans to pay a cash dividend of 5.1 yuan (including tax) for every 10 shares, with a dividend ratio of nearly 90%.
Epidemic, warm winter and economic factors affected the recovery process of main brands, and the net increase of Direct stores continued. In 2021, the revenue of main brands reached 15.13 billion yuan, a year-on-year increase of 9.9%, a decrease of 13.1% compared with 2019, and 21q4 and 22q1 decreased by 8.5% and 7.3% respectively year-on-year. In terms of channels, at the end of 2021, the number of Direct stores was 727, with a net increase of 241, and the number of franchise and associated stores was 4945, with a net close of 112. It is expected to continue to open about 150200 new businesses this year (a net increase of 33 in 22q1). The increase in the proportion of direct sales revenue will promote the year-on-year growth 4pcts to 40% of the gross profit margin in 2021.
Other brands maintained high growth, and San Keno grew steadily. 1) Other brands: in 2021, the revenue reached 2.04 billion, with a year-on-year increase of 27.1%, of which ovv increased by about 50%, Hailan preferred increased by about 10%, and 22q1 still maintained a good growth momentum, with a year-on-year increase of 16.7%. In terms of channels, at the end of 2021, the number of Direct stores was 388, with a net increase of 69. The number of franchise and associated stores was 1592, with a net increase of 73. The gross profit margin increased by 5.7pcts to 44.1% year-on-year. 2) San Keno: in 2021, the revenue reached 2.26 billion yuan, a year-on-year increase of 9.1%, maintaining a steady growth, and the gross profit margin fell 1.1pcts to 51.6% year-on-year.
Online business continued to grow, and offline gross profit margin increased. 1) Online channels: in 2021, the revenue reached 2.72 billion, a year-on-year increase of 33%, and the gross profit margin decreased by 2.3pcts to 36.2% year-on-year, mainly due to more olai activities held in 2021. 2) Offline channels: in 2021, the revenue reached 16.7 billion, with a year-on-year increase of 8.5%, and the gross profit margin increased by 4.5pcts to 42.7%, mainly due to the recovery of offline discounts and the increase in the proportion of direct sales revenue in 2021.
At the end of 22q1, the company’s inventory was 8.56 billion, with a year-on-year increase of 17.6%, and the number of inventory turnover days was 263 days, with a year-on-year increase of 53 days. We believe that the increase of the company’s inventory is mainly caused by the epidemic. We believe that although the epidemic disturbs the company’s short-term performance, we still see the continuous iterative upgrading of the main brands in 2021, especially in product innovation. We have launched high-function and quality products such as “six-dimensional elastic pants”, “three anti black and white small T” and “all-round jacket”. Other brands also have good performance, and are expected to contribute more performance increment to the group in the future.
Profit forecast and investment suggestions
Considering the epidemic situation, according to the annual report and the first quarterly report, we lowered the profit forecast for 22-23 years and predicted that the earnings per share in 20222024 would be 0.61, 0.71 and 0.81 yuan respectively (compared with 0.73 and 0.85 yuan in the previous 22-23 years). With reference to comparable companies, we gave the company an 11 times PE valuation in 2022, corresponding to the target price of 6.69 yuan, and maintained the “buy” rating.
Risk tip: the repeated epidemic and the retail risk caused by China’s economic downturn, the cultivation of new brands is lower than expected.
